Negotiators agree to end geoblocking in move ahead on EU ecommerce files

Negotiators sealed a compromise agreement to get rid of geoblocking restrictions for online shoppers---completing one piece of the European Commission's outstanding legislative proposals relating to the ecommerce sector. [Pixabay]

MEPs, member states and the European Commission agreed on a compromise deal to end geoblocking restrictions, a move that will force e-commerce businesses to sell to shoppers around the EU regardless of what country they live in.

Negotiators wrapped up discussions in the early hours of Tuesday (21 November), one-and-a-half years after the Commission proposed the online shopping legislation.

Their compromise will give shoppers the right to purchase from websites anywhere in the EU and will require businesses to stop practices of refusing customers, or rerouting them to other websites because they are located in a certain member state.

Member states struck down a measure in the Parliament’s version of the bill that would have extended the ban on geoblocking to music streaming services and ebooks, allowing customers to access offers in other EU countries.

MEPs had pushed for the rules to apply to copyrighted content but came up against fierce opposition from member states, as well as music streaming services, ebook sellers and video game producers.

The Commission’s original proposal did not suggest applying the ban on geoblocking to any copyrighted material.

The agreement to get rid of the online restrictions “would mean more choice to consumers, a boost to e-commerce and a big step towards completing the digital single market. We believe it’s a balanced outcome and hope the member states can support the agreement in Coreper in coming weeks,” said Annikky Lamp, a spokeswoman for the Estonian presidency of the Council of the EU.

The deal includes a review clause that will require EU lawmakers to reexamine how the law works two years down the line—with the potential for extending it at that point to also cover non-audiovisual copyrighted content like music streaming services and ebooks.

Extending the rules to apply to copyrighted material was a major point of disagreement that slowed negotiations earlier this year.

Dita Charanzova, the Czech Liberal MEP who negotiated the file on behalf of MEPs in her political group, tweeted after negotiations finished that the question of whether or not the rules might apply to copyrighted material was “the elephant in the room”.

However, the elephant in the room, the geo-blocking of digital copyrighted services, has been excluded from the scope. #geoblocking

MEPs in the Internal Market Committee approved geoblocking rules that could open up access to music streaming sites and ebook sales across the EU, going beyond the European Commission’s proposal and setting up a fight with industry groups.

Spotify has argued against the Parliament’s push to require the streaming service to give EU-based customers access to any of its offers in other member states. Fees for the service vary between EU countries, and the company might have been forced to raise prices in member states like Bulgaria and Estonia, to match fees that are around twice as high in some western EU countries.

Leading up to Monday’s negotiations, the Commission had gone on the offensive promoting its geoblocking proposal and urged MEPs and member states to clinch a deal on the file.

The Commission has recently amped up efforts to push its digital single market proposals through three-way talks with MEPs and the Council. There are less than two years left in the current Commission mandate, and 17 out of the Commission’s 24 digital single market proposals are still wading through negotiations.

Commission President Jean-Claude Juncker told a summit in Estonia in September that he wants negotiations on all of the proposals from the flagship digital single market programme to finish by the time he leaves office in 2019. He then chided EU heads of state at the summit for slowing down progress on some files.

“We want this pace to carry on,” a Commission source said after the geoblocking agreement.

The Commission proposed the legal ban on geoblocking in May 2016 and also announced a lineup of other new legislation aimed at getting rid of barriers for online shopping between EU countries.

The goal is to increase online sales and help European e-commerce grow.

More than 60% of internet users in the EU reported that they shopped online within the last year, according to 2016 Eurostat data.

Out of those online shoppers, 68% reported no problems, while only 3% of total online shoppers said they experienced fraud, or foreign retailers refused to sell to them.

But most online shoppers in the EU do not make purchases from businesses outside the member state where they live. Thirty-two percent of shoppers buy from retailers in other EU countries, while 20% buy from businesses outside the bloc. Eighty-nine percent of online shoppers purchase from companies located in the member state where they live.

Consumer groups heralded the agreement as a victory for online shoppers.

Monique Goyens, director of the European Consumer Organisation, said the new rules are “very good news for consumers”.

“They will now be able to compare products, digital content and services from across the EU and buy those best suited for their taste and wallet,” she added.

Estonia, which chairs the rotating Council of the EU until the end of December, also wants to strike an agreement by then with the Commission, member states and MEPs on a separate proposal that could bring down prices to deliver parcels across the bloc.

In another move forward on the Commission’s e-commerce proposals, MEPs in the Legal Affairs and Internal Market Committees agreed on Tuesday morning on legislation affecting the sale of digital content.

The European Commission has narrowly avoided a showdown with the music industry and e-book publishers over its new plans to stop e-commerce firms charging buyers more if they live in certain EU countries.